They are not expecting people to bling these out. They are expecting the young badge whores not sure about leasing a 328i stripper for $399/mo. to snap these up stripped at $299/mo.

This. The OP is right that it makes no sense to buy a loaded 320i. If you can afford a loaded $45K car why compromise on the engine to save money. Most people will buy fairly basic versions. If I were to get one it would have the sport package, heated seats and maybe leather seats. A 320 optioned this way is $36,695.00 while a 328 Sport with leather and heated seats is $42,200 (of course with more std equipment).